You can bypass the internal DAC's of apple's stuff with a DAC/DAC+Amp that is certified by apple, I.E. paying apple to get the codes to bypass the internal DAC. Not sure if your 5th gen is supported though. BUT, your 5th gen has a pretty decent dac to boot anyway. Plus a DAC certified by apple cost upwards of $400 at least IIRC

If you're stuck solid on the iPod, get a amp + LOD cable. I'll start the ball rolling with some brands.

silver plated copper- dynamics of copper while giving you a little brighter mids and highs

pure silver- best option imo, more expensive too...silver gives you a brighter presentation in the mids and highs

a LOD will give you a direct line out this will provide a cleaner signal so reguardless of what materials you choose the signal will be cleaner than the headphone jack.

as far as price you can get a fiio l9 FOR 10.00 or a ALO audio SXC 195.00 OR WHIPlash for 150.00 again depending on the type of plug, and the materials used. prices are going to vary. obviously you get what you pay for so expect a higher end lod to be of better quality than a cheaper one.